Wallace just purchased a new house for K120,000. He was able to make a down payment equal to 25% of the value of the house, the balance was mortgaged. The rate by the bank is 10% compounded annually. The mortgage has a 20-year amortization period (this means that payments are calculated assuming it will take 20 years to pay off the loan).

Required:

(a)What will be the size of the annual payment?

(b)What will be the balance remaining on the mortgage after 5 years?